US sues to split up Ticketmaster and Live Nation in a groundbreaking monopoly lawsuit

US sues to split up Ticketmaster and Live Nation in a groundbreaking monopoly lawsuit
1 month 3 weeks 6 days ago Thursday, May 23 2024 May 23, 2024 May 23, 2024 2:28 PM May 23, 2024 in News - AP National
Source: CNN
The U.S. government and dozens of states sued Live Nation, whose website is shown here in an April 17 photo, in a antitrust lawsuit on Thursday, May 23, 2024. Gabby Jones/Bloomberg/Getty Images via CNN Newsource
Originally Published: 23 MAY 24 10:30 ET
Updated: 23 MAY 24 14:37 ET

Washington (CNN) — In a groundbreaking antitrust lawsuit that threatens to upend the way concertgoers pay for tickets, the US government and dozens of states sued Live Nation on Thursday, alleging that for years the parent company of Ticketmaster abused its industry dominance to harm fans nationwide.

The long-expected suit, filed in New York by the Justice Department and 30 state and district attorneys general, challenges the country’s biggest ticketing website and concert promoter, which regulators allege was the mastermind of a plan to stifle competition. The governments are seeking a jury trial and a breakup of the company.

If successful, the case could lead to sweeping changes in the market for live events – an industry that came under intense scrutiny in 2022 after glitches at Ticketmaster blocked millions from purchasing tickets for Taylor Swift’s “Eras” tour.

For many critics of Live Nation, the Swift debacle revealed how a lack of competition has led to harms ranging from poor customer service to confusing pricing to expensive ticketing fees to restrictions on ticket resales — amounting to what many consumers complain of as death by a thousand cuts.

But fans hoping to save money aren’t yet out of the woods, as the suit will likely take years to make its way through the court system. Meanwhile, the exorbitant fees they know all too well aren’t likely to be dramatically affected.

In a statement, Live Nation called the DOJ’s allegations “baseless.”

“The DOJ’s lawsuit won’t solve the issues fans care about relating to ticket prices, service fees, and access to in-demand shows,” Live Nation said in a statement. “Calling Ticketmaster a monopoly may be a PR win for the DOJ in the short term, but it will lose in court because it ignores the basic economics of live entertainment.”

Unlike some of the other businesses DOJ has sued, Live Nation does not reap enormous profits from its market position, the company added.

“Live Nation’s net profit margin last fiscal year was 1.4% - nowhere near other DOJ targets in the tech sector,” the company said in a statement, noting Apple and Google – both subjects of the Justice Department’s antitrust lawsuits, have margins north of 24%.

Shares of Live Nation (LYV) fell 5% on the news.

Not just frustrating … it’s illegal, DOJ says

Attorney General Merrick Garland in a press conference Thursday rattled off a seemingly endless list of fees Ticketmaster charges customers. “Those include: ticketing fees, service fees, convenience fees, platinum fees, per-order fees, handling fees and payment processing fees, among others.”

But Garland noted the annoyance isn’t why the Justice Department sued.

“We’re here not because Ticketmaster’s conduct is inconvenient or frustrating … we’re here because it’s illegal,” Garland said.

Prosecutors allege that Live Nation’s end game was to monopolize the ticketing and live events industry by cutting exclusive deals with the country’s largest venues, ensuring that all their future events were ticketed through the company’s platform.

According to the lawsuit, Live Nation directly manages more than 400 artists, controls around 60% of concert promotions at major concert venues across the country, and controls more than 265 concert venues in North America. And through Ticketmaster, the suit says, Live Nation controls roughly 80% or more of major concert venues’ primary ticketing for concerts.

“We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators,” said Garland in a statement. “The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services. It is time to break up Live Nation-Ticketmaster.”

Bad blood

Musicians, too, have complained of Live Nation’s tightly integrated operation, which combines event ticketing services with control of roughly 200 popular US venues, a linkage that critics say allows the company to dictate terms and fees to artists.

Reacting in 2022 to the Ticketmaster fiasco that enraged her fans, Swift wrote on Instagram that the situation was “excruciating for me” and “pisses me off.”

The company also has bad blood with several other artists who have taken aim at Live Nation’s practices, including The Cure front man Robert Smith, who said he was “sickened” by Ticketmaster’s fees, and country singer Zach Bryan, who in 2022 released a collection of live performances entitled “All My Homies Hate Ticketmaster (Live at Red Rocks).”

Garland in his press conference talked about his personal experience going to a Bonnie Raitt concert in high school and seeing Bruce Springsteen as a warmup act.

“We all knew we had just seen the future of rock and roll,” he mused. “The Justice Department filed this lawsuit for fans who should be able to go to concerts without a monopoly standing in their way.”

Ticketmaster competitors were pleased by the lawsuit.

“For nearly fifteen years, the Ticketmaster and Live Nation monopoly has ignored the fan experience: fans have been limited to a singular platform only to suffer through a consumer experience that fails them repeatedly,” StubHub said in a statement. “We hope it creates a healthier ticketing market, one that empowers competition, drives innovation, and places the fan experience at the forefront.”

An unpopular merger

Now, the US government is?opposing Live Nation’s economic power for the first time since the company merged with Ticketmaster in 2010. Regulators chose to tolerate it at the time; rather than sue to block the deal, they imposed certain obligations on the company meant to anticipate potential harms that the merger might cause.

The lawsuit will likely be cheered by antitrust advocates who say they knew the Live Nation-Ticketmaster merger was trouble from the start. Among the deal’s critics are US lawmakers including Minnesota Democratic Sen. Amy Klobuchar and Connecticut Democratic Sen. Richard Blumenthal, who as far back as 2019 were calling on the Justice Department to investigate Live Nation for not living up to its commitments. Klobuchar, Blumenthal and a number of other senators including Texas Republican Sens. John Cornyn and Ted Cruz have proposed numerous bills to regulate the ticketing industry.

“The Justice Department is doing the right thing today by seeking to break up this monopoly that has long harmed fans, artists, and venues,” Klobuchar said in a statement. “In addition to holding Live Nation accountable, I’ve also fought to create common sense guardrails to promote healthy competition in the ticketing market, and I will continue to work towards passing my bipartisan legislation that would do just that.”

The lawsuit highlights how regulators now believe, more than a decade on, that the behavioral modifications Live Nation agreed to have failed. Those claims dovetail with a wider push by the Biden administration ramping up antitrust enforcement across the entire economy, with officials blaming decades of lax enforcement for a wave of consolidation and a reduction in consumer power.

The request for a jury trial is unusual: Recent antitrust lawsuits have asked for a judge to rule, because they can be long and get into complicated law.

The list of states and districts participating in Thursday’s suit includes Arizona, Arkansas, California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin, Wyoming and the District of Columbia, according to the court docket in the US District Court for the Southern District of New York.

“For too long, Live Nation and Ticketmaster have unfairly and illegally run the world of live events, abusing their dominance to overcharge fans, bully venues, and limit artists,” said New York Attorney General Letitia James in a statement. “Everybody agrees, Live Nation and Ticketmaster are the problem and it’s time for a new era.”

This is a developing story. It will be updated.

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